Creating robust product pipelines is a top priority for most global orthopaedic device companies, yet our industry’s commercial success rate for new product launches remains less than 20%. Traditionally one of the largest contributors to the less-than-stellar success rate is failure in the very first steps of the development process: a new technology assessment. We will examine the ways that companies address challenges associated with new technology assessments, and some of the key lessons learned.

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2. New Technology Assessment | June 2017
{Solutions.}

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New Technology Assessment – Risk vs Reward or Opportunity
Oct 2016 – “Measuring the “Risk” and defining the “Opportunity” has never been harder
or more challenging in an ever changing global healthcare environment.”

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New Technology Assessment – Risk vs Reward or Opportunity
Oct 2016 – “Measuring the “Risk” and defining the “Opportunity” has never been harder
or more challenging in an ever changing global healthcare environment.”
How can we do this better?

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New Technology Assessment – Risk vs Reward or Opportunity
• Examine examples of current new challenges and risks
• What is working and what is not working – case studies
• Recommendations
• A quick look to the future ….
Today’s Discussion & Takeaways

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New Technology Assessment – Risk vs Reward
Risk categories continue to grow for the Medical Device industry and need to be
Incorporated into our NTA models….
“Classics”
• Quality and Regulatory Risk
• Clinical Risk
• Manufacturing and Supply Chain Risk
• Financial Risk
• Intellectual Property and Licensing Risk
• Healthcare Economic Risk
(Initial global reimbursement)

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New Technology Assessment – Risk vs Reward
Risk categories continue to grow for the Medical Device industry and need to be
Incorporated into our NTA models….
For the most part we are pretty good
at managing the “Classics”
“Classics”
• Quality and Regulatory Risk
• Clinical Risk
• Manufacturing and Supply Chain Risk
• Financial Risk
• Intellectual Property and Licensing Risk
• Healthcare Economic Risk
(Initial global reimbursement)

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New Technology Assessment – Risk vs Reward
Risk categories continue to grow for the Medical Device industry and need to be
Incorporated into our NTA models….
+
“Classics”
• Quality and Regulatory Risk
• Clinical Risk
• Manufacturing and Supply Chain Risk
• Financial Risk
• Intellectual Property and Licensing Risk
• Healthcare Economic Risk
(Initial global reimbursement)
“New Areas of Risk to be Considered”
• Global Business Risk
• Cybersecurity/Patient
Privacy Risk
• Commercialization Risk
 Market Access Risk
 Distribution Risk

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New Technology Assessment – Risk vs Reward
“Classics”
• Quality and Regulatory Risk
• Clinical Risk
• Manufacturing and Supply Chain Risk
• Financial Risk
• Intellectual Property and Licensing Risk
• Healthcare Economic Risk
(Initial global reimbursement)
Risk categories continue to grow for the Medical Device industry and need to be
Incorporated into our NTA models….
“New Areas of Risk to be Considered”
• Global Business Risk
• Cybersecurity/Patient
Privacy Risk
• Commercialization Risk
 Market Access Risk
 Distribution Risk
+
“Do I really need to consider these
new areas of risk with my NTAs?”

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New Technology Assessment – Risk vs Reward
For the rest of the discussion, we will focus on these three challenging new areas
of risk which need to be incorporated more frequently into our
New Technology Assessments
• Global Business Risk – How well do we understand global product revenue
potential and adoption? How do we prioritize our global markets for secondary or
tertiary product launches?
• Cybersecurity/Patient Privacy Risk – Will this technology or future product have a
data connectivity element? How well do we understand the product usage
and connectivity environment?
• Commercialization Risk – Have we discussed the technology or future product
clinical and economic value with key Market Access stakeholders? Do we have the
appropriate distribution channel and partners to be successful (globally)?

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Global Business Risk

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New Technology Assessment – Global Business Risk
We are all challenged to expand our new products into new global markets but is the
investment worth it? Will the product meet the economic and clinical needs of
the new market? Do you have to conduct a NTA for each potential market?
“Global NTAs seems like too much work….”

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New Technology Assessment – Global Business Risk
Some key questions to be asked:
1. How does your NTA “Product A” fit into your company’s Global Product Strategy?
2. If “Product A” does fit in your firm’s Global Product Strategy, do you have a
common global NTA framework? Does the global NTA framework require
participation from global stakeholders?
3. If “Product A” passes the global NTA framework, how is the product development
and commercialization managed globally? Ultimately who is accountable and
who is not for “Product A’s” commercial success?
4. How does your company design and develop a product (“Product A”) for a market
other than its home market?

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Company in this example uses a proprietary scoring system based on 1 to 100 scale (1 =
Lowest Risk Score). A score greater than 75 will require a risk mitigation plan. Converting
risk scores to 1-100 facilitates communication across a global organization
Product A (Robotic Spine Surgery System)
Risk Categories NA Europe Japan BRIC
Quality & Regulatory Risk 35 45 50 60
Manufacturing & Supply Chain Risk 65 15* 15* 15*
Healthcare System Clinical Risk 70 78 80 75
IP & Licensing Risk 60 55 75 70
Healthcare System Economic Risk 85 90 80 95
Company Financial Risk 70 75 77 80
Cybersecurity Risk 65 65 70 75
Market Access 80 85 85 90
Distribution 55 65 70 85
New Technology Assessment – Global Business Risk

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Company in this example uses a proprietary scoring system based on 1 to 100 scale (1 =
Lowest Risk Score). A score greater than 75 requires risk mitigation plan. Converting risk
scores to 1-100 facilitates communication across a global organization
Product A (Robotic Spine Surgery System)
Risk Categories NA Europe Japan BRIC
Quality & Regulatory Risk 35 45 50 60
Manufacturing & Supply Chain Risk 65 15* 15* 15*
Healthcare System Clinical Risk 70 78 80 75
IP & Licensing Risk 60 55 75 70
Healthcare System Economic Risk 85 90 80 95
Company Financial Risk 70 75 77 80
Cybersecurity Risk 65 65 70 75
Market Access 80 85 85 90
Distribution 55 65 70 85
New Technology Assessment – Global Business Risk

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Cybersecurity/Patient Privacy Risk

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New Technology Assessment – Cybersecurity Risk
The emerging technology and demographic trends are pushing the cybersecurity and
patient privacy risks with the following common examples:
1. With an aging global population, there will be greater demand for implantable
medical devices which will need wireless communication for data analysis and
EMR integration
2. Wearable devices and sensor-based devices which utilize low-power wireless
communications such as Bluetooth technologies require secured-networked
base stations (e.g. phones, tablets, etc.)
3. 3D Printing for patient-specific devices will eventually require FDA cybersecurity
standards
Cybersecurity expertise and capabilities are driving product differentiation
the marketplace

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New Technology Assessment – Cybersecurity Risk
FDA has provided two guidance documents to assist the industry in the area of
cybersecurity
• Postmarket Management of Cybersecurity in Medical Devices
(issued on Dec 28, 2016)
• Content of Premarket Submissions for Management of Cybersecurity
in Medical Devices (issued Oct 2. 2014)
The Postmarket guidance provides a suggested risk-benefit framework and
assessment methodology with which manufacturers can use to meet the regulatory
obligations under 21 CFR 806.
The risk assessment methodology combines concepts from the FDA recognized
standard ISO 14971 (definition of risk and harm), and the common vulnerability
scoring system known as CVSS.

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New Technology Assessment – Cybersecurity Risk
While cybersecurity risk makes the front pages with implantables and infusion pumps,
we are finding many products currently under development confronting cybersecurity
issues for the first time.
Example: Wellness products company which makes products for the Post-Acute Care
Physical Therapy market. A key post-feasibility customer requirement was the ability to
integrate patient’s PT data with the patient’s EMR files.
• No Cybersecurity Product Plan
• No product development capability in connectivity to EMR software systems
Solution: Find software development partners with cybersecurity and EMR experience
($$$) and to develop internal cybersecurity expertise for future product development.
Result: Delaying the product launch by 12 months to test data security in variety of
connectivity environments and conditions

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Commercialization Risk

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New Technology Assessment – Commercialization Risk
The biggest global challenge we are finding with the launch of new products and
technologies is Global Market Access.
The biggest global challenge we are finding with the launch of new products and
technologies is Global Market Access.
“The Market Access Black Box”

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New Technology Assessment – Commercialization Risk
What is Market Access?
“In most cases, market access [control] is a justifiable means through a local or
regional committee to control spending on inappropriate or redundant technology
and products.” – CEO, Health System
In most hospitals (and some surgery centers), there is a Value Analysis Committee(s)
of VAC which makes the decision on “value” of a particular new product or technology.
Decision making is made on a variety of criteria but the largest drivers are “clinical
value” and “economic value”.
Because of their influence and control on purchasing and ultimately product adoption,
we need to have their “voice” in our NTAs!
Ideally we recommend you create a consultative Market Access Panel(s) with
VAC members (current and past) to assist your organization with Market Assess.

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New Technology Assessment – Commercialization Risk
Small medical device company with a novel technology in a new category
need Market Access insights through its early development stage.
Action. They interviewed over 20 different VAC members on their product concept and
prototypes. The VAC members had a variety of backgrounds including Finance,
Supply Chain, Administration, Surgery, Anesthesiology, Pharmacy and Nursing.
Result. Interviews provided insights on the VAC decision making process and
recommendations on future clinical and economic studies. The product launched
last year and its VAC approval rate is over 90% within 90 days of submitting
their application.
For their next generation product, they created a Market Access Panel (7 out
of the original 20+ VAC members) to evaluate new complimentary technologies
and product concepts.

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Takeaways and Recommendations

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New Technology Assessment – Takeaways and Recommendations
Global Business Risk
1. Capture country or regional product barrier risks
2. Reexamine the global business risk during the product development process
(Gate Review Meetings?)
3. Ideally create a standardized scoring system for the global commercial org
which facilitates discussion and planning
4. Facilitate early communication and definition of stakeholder roles and
responsibilities
Cybersecurity Risk
1. Incorporate ISO 14971 and CVSS elements from the FDA Guidelines into
your cybersecurity risk assessments
2. Have a Cybersecurity Product Plan for each product requiring connectivity
and secured sharing of patient data
3. Extensively test the product’s data system in a wide variety of environments
and conditions

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New Technology Assessment – Takeaways and Recommendations
Commercial Risk
1. As Market Access barriers become more prevalent globally, please make
sure you are incorporating “clinical value” and “economic value” into
your NTAs
2. Consider creating a Market Access Panel for NTAs and New Product
Development
3. Examine global distribution networks. Do you have the right partners for
this technology or product? What type of skillsets or experiences or
complementary products are going to be required to success launch
the product?

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More medical device firms are bringing some of the NTA frameworks and algorithms into their
annual company’s Product Line Strategy assessments, especially for the firm’s more
competitive, higher revenue product offerings.
• Why are some firms doing this? They want to be proactive on a critical product category
evolution to new technology, new competitors, and regional market effects
• Measure how “vulnerable” a product might be in a particular category. One firm is using a
“Product Vulnerability Index” to measure this.
• Recommendation: If you are interested in measuring risk associated with your current
products, I would start to examine:
• “Category” effects first then examine the product’s “job” – is your product category
vulnerable? Reimbursement shrinking and why? Are or will there be alternative
technologies in the therapeutic space competing with your product category?
New Technology Assessment
A quick look to the future ….

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"Progress always involves risk. You can't steal second base and keep your foot on first."
- Frederick B. Wilcox in Unicorns and Tadpoles, 1958
New Technology Assessment
A Closing Thought….

29. WE APPRECIATE YOUR TIME TODAY.
{Thank you.}
Tom Harper
Management Consulting
Plante Moran
Office: 248.223.3819
E-Mail: tom.harper@plantemoran.com

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